In recent years, the reform of electricity market implemented in the Baltic states gave an opportunity for consumers choose the best solutions and the most advantageous conditions offered by independent electricity suppliers. Today Lithuanian consumers are already able to assess conditions, prices, reliability and experience, attention to consumers, environmental protection and renewable energy offered by different electricity suppliers.
In 2013, the common Baltic electricity market in Lithuania, Latvia and Estonia was developed. It consists of different electricity trading areas, and after the establishment of planned interconnections “NordBalt” (at the end of 2015, Lithuania-Sweden) and “Estlink 2” (in 2014, Estonia-Finland), the Baltic electricity market will be prepared to act in common North European electricity market.
Electricity market participants
Electricity market participants include the electricity producers, transmission and distribution companies and energy suppliers:
- Electricity is produced by power plants that sell their product on the general wholesale electricity market of suppliers and producers.
- Electricity is distributed by the distribution systems and companies that are licensed as the distribution network operator.
- Electricity is supplied by the licensed supplier companies that purchase electricity in the wholesale market from the producers or in the electricity exchange and sell to consumers.
Electricity price and opportunities to change it
Electricity price paid by end-consumers consists of even several components: the share of production and supply, the share of distribution and taxes.
It should be noted that consumers always pay for distribution service the same price which can not be changed by the electricity producers and suppliers. It is so-called the principle of “postage stamp” according to which the same price for electricity distribution is paid. This price is always paid to the network operator to which the network consumer’s devices are connected. Every year it is set by the transmission and distribution network operators and the National Control Commission for Prices and Energy.
But now consumers can also choose an independent electricity supplier and in this way cut that share of electricity price which depends on electricity suppliers and producers.
Electricity price components for business consumers
In 2018, final electricity price for business consumers consists of the guarantee supply price and distribution service price (for consumers who have not chosen an independent supplier). 42.4-55.6% of the final electricity price (it depends on whether you are connected to low or medium voltage electrical power grids) consists of components which are dependent on neither manufacturer nor independent electricity supplier.
On the other hand, when choosing an independent electricity supplier you can reduce the share of production and supply.
|Description||Rate (EUR ct/kWh VAT excl.)||Possibility to change the price|
|Guarantee supply price||Guarantee supply price||4.38||You can reduce your price to pay by choosing an independent electricity supplier|
|Distribution service from high voltage power grids||Electricity distribution price consists of the costs incurred by distribution system operator because of power distribution from high voltage power grids.||0.619||You cannot change|
|System services||System (high quality electricity supply) services are services that ensure the stability and reliability of energy system, the prevention and elimination of system emergencies, the required power reserve and permeability by distribution grids within the limits of electricity supply quality and reliability requirements.||0.529||You cannot change|
|Distribution cost via medium voltage power grids||Electricity distribution price consists of costs incurred by distribution network companies that distribute electricity via medium and low voltage power grids. Electricity distribution price depends on voltage from which consumers get (use) electrical power.||0.718||You cannot change|
|Distribution cost via low voltage power grids||2.145||You cannot change|
|PS (public service)||These money are allocated to the Lithuanian Power Plant where electrical power production is important for the assurance of secure electricity supply and power system reserves, to support combined heat and power plants, renewable energy power plants (wind, hydro, biomass and solar) and another part is for strategic objects.||1.35||You cannot change|
|Average electricity distribution service price for consumers who receive electricity power from low voltage electrical power grids (“The postage stamp” rate)||5.48||This share of price is set by transmission and distribution operators approved by NCCPE*|
|Average electricity distribution service price for consumers who receive electricity power from medium voltage electrical power grids (“The postage stamp” rate)||3.22||This share of price is set by transmission and distribution operators approved by NCCPE*|
Sources: National Control Commission for Prices and Energy, AB ESO
*NCCPE – National Control Commission for Prices and Energy
AB INTER RAO Lietuva is a socially responsible electricity supplier that is developing electricity production from renewable energy sources.
AB INTER RAO Lietuva is not only of the largest electricity importers but also the supplier that controls 30 MW power park “Vydmantai wind park” in western Lithuania. Therefore, by choosing us you will choose not only the very favorable electricity supply conditions but also an opportunity to contribute to the production of electricity from renewable energy sources in Lithuania and the neutralization of climate change factors, and saving our country environment.
As the economies of the Baltic countries are stabilizing, it is forecasted that the demand for electricity will grow again over the coming years. It is expected that changes in electricity market will encourage the development of new generating sources and wider use of renewable resources.
When the electricity exchange Nord Pool Spot was opened in Latvia on 3 June, 2013 the electricity market mechanisms ensuring transparent and effective competition were established in all Baltic states. After the construction of planned electricity connections with Scandinavian countries the integration of the Nordic electricity market will be completed and after the completion of two stages of Lithuania-Poland connection the integration into common European electricity market will be available too.
All these changes should create more favorable and fair conditions for consumers who would be free to choose electricity supplier that meet their needs the best and to use new opportunities.